The strategic blueprint’s 152 recommendations are to be implemented in phases to achieve the country’s vision of becoming an internationally competitive capital market that is a highly efficient conduit for the mobilization and allocation of funds, and has a strong regulatory framework.

As at the end of 2005, Phases 1 and 2 of the CMP had been completed. The Malaysian capital market, comprising the equity and corporate debt/bond markets, is regulated by the Securities Industry Act 1983, Securities Commission Act 1993, Companies Act 1965, Futures Industry Act 1993 and Labuan Offshore Securities Industry Act 1995.

Last year, the capital market expanded by 17 percent, or RM190.1 billion, to RM1.3 trillion. Equities made up RM848.7 billion, or 65 percent of the total value, while corporate debt/bonds accounted for RM452.4 billion (35 percent).

Last year, the Securities Commission (SC) approved fund-raising exercises totaling RM79.3 billion, of which RM75.8 billion was in the form of private debt securities (PDS). For PDS issued in 2007 to date, go to “Bond Market’’ in www.sc.com.my, click on “Issuance Information.’’

The total value of funds raised through initial public offerings and the issuance of preference shares amounted to RM3.46 billion.

For details on the CMP, go to www.sc.com.my and click on “Capital Market Masterplan.”
To view the SC Annual Report 2006, go to www.sc.com.my and click on “SC releases 2006 annual report’’.

Malaysia’s corporate bond market is an important alternative source of funds for the private sector. In recent years, the biggest issuers of PDS were the finance, insurance, real estate, business services and construction sectors. Together they account for more than half of all PDS issued in the country.

A component growing in importance is the Islamic capital market, which functions as a parallel market to the conventional capital market but caters to capital seekers and providers who choose to raise funds through instruments that comply with Syariah principles.

The development of the Islamic capital market gained impetus when Bank Negara Malaysia, the SC and other stakeholders launched the Malaysian International Islamic Finance (MIFC) initiative last year to position Malaysia as an international Islamic financial centre.

In 2006, the SC approved Islamic sukuk amounting to RM42 billion, which accounted for 53 percent of all local bonds issued. This record gives Malaysia the distinction of having issued 67 percent of the world’s sukuk issues.

Today, 86 percent of the more than 1,000 stocks listed on Bursa Malaysia are Syariah-compliant. Last year, the country reached a milestone with the listing of two Islamic real-estate investment trusts (REITs) on the local stock exchange.

The Islamic capital market products now available to Muslims include equities, Islamic unit trusts, Syariah indices, warrants, call warrants and crude palm oil futures contract.
Malaysia’s growing debt market has attracted international debt-rating agencies such as Standard and Poor’s from the United States to set up office here to offer services such as independent credit ratings, indices, risk evaluation, data and valuations.

While the fund-raising exercises of listed companies are subject to approval by the Securities Commission, those of non-listed companies are required to comply with rules relating to corporate equity in Malaysia. For more information, click here